View more on these topics

Editor’s note: Why I’m still not sold on Intelliflo’s model portfolio service

When Intelliflo got bought by Invesco last year, market watchers waited for its next moves with baited breath. That wait is over.

The size of Intelliflo’s ambitions didn’t disappoint last month as it revealed plans to launch a model portfolio service. It’s a game changer, bringing integrated investment solutions to the third of advisers whose eyeballs Intelliflo’s back-office technology already captures.

Maybe I misunderstood the mood music, but I recall Invesco saying its decision to buy Intelliflo wasn’t about pushing products. Specifically, it said: “We are not about to integrate Intelliflo into our distribution.”

The fact that half of the funds in some of the new models offered on Intelliflo by Invesco are Invesco’s own doesn’t really allay my fears that the deal was actually about distribution for the asset manager, and margin for Intelliflo.

Look at Intelliflo’s financials. Recurring revenue was up 22 per cent last year, and users were up 21 per cent. Did it need to enter the investment game? Couldn’t it have stuck to its knitting? It had decent profitability already – £4.8m profit on £20.5m of recurring revenue – albeit that’s nothing compared to what some asset managers report.

Modern life planners love Intelliflo for features including its dynamic fact-find tools. But those are expensive to build and probably don’t make much money on general subscription, even if they are arguably more important to the client experience than investment solutions. I fear that, on a pure profit basis, all that lovely development budget will go into investment-related updates, and not on core technology to help planners run better firms.

That your MPS is now integrated into your back-office is undoubtedly a compelling pitch in an era of time-pushed advisers. But I’d rather everyone was a bit more honest about why they’ve done it. All the talk at the time of the deal was about funding to take Intelliflo international. Can they really take an MPS global when investment and advice suitability rules vary so widely across the globe?

Yes, you’re cutting out unnecessary basis points taken by some platforms – a huge bonus. But, if you’re moving down this road, why doesn’t Intelliflo just become a platform and have done with it? Why not offer full product research and investment reporting tools, cashflow modelling, asset allocation and all the rest as bolt-ons?

The more fund managers join, the more Intelliflo starts to look like a platform anyway.

Just as when platforms get ideas above their station, I’m not sure back-office systems eating more of the value chain is necessarily a good thing. Given this is such a landmark deal, advisers mustn’t miss the opportunity to properly scrutinise it.


PFS launches online mentoring programme for members

Members of the Personal Finance Society can now mentor and be mentored by other members from anywhere in the world on a platform called Connect launched today. The tool was built to promote professional development and learning for personal finance professionals at any stage of their careers. The industry body says mentorship can be undertaken […]

Ex-UBS compliance officer found guilty of insider dealing

The FCA has won a case against a former UBS compliance officer and her friend in which the pair were convicted of insider trading. The Financial Times reports a jury in Southwark Crown Court yesterday found Fabiana Abdel-Malek, 36, and day trader Walid Choucair, 40, guilty on three counts of insider trading between June 2013 and […]

Men and fatherhood, sex equality,

Let’s talk about sex (equality)

Tracey Dickson – Marketing Consultant It’s been 100 years since women were given the right to vote in the UK, and we’ve seen a lot of stories in the press recently about this triumph and the ongoing campaign for equality for women – both in wider society and in the workplace. Today something else in the […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. So the investment community moves further downmarket. Does everybody want to shop at Primark? Doesn’t anyone want a bespoke service and will Saville Row go bust?

    Model portfolios presume that all clients in those categories are the same. Is this what the Regulator calls shoe-horning?

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm